Is College Worth the Cost?

The second national Gallup-Purdue Index identified stark differences in graduates of public, private and for-profit colleges when asked if their degree was worth the cost and raised questions across all institutions about the value of a college degree. The survey also found student loan debt had a significant impact on respondents’ post-graduation plans and confirmed 2014 survey results that highlight the importance of supportive relationships between professors and students and the value of internships and other work experiences.

Released Tuesday (Sept. 29), the second annual Gallup-Purdue Index (GPI) is a comprehensive national study of more than 60,000 college graduates over two years conducted by Gallup in partnership with Purdue University and Lumina Foundation. The survey was launched last year as a response to the call for increased accountability in higher education and does not serve as a ranking or rating system. The first-of-its-kind study will be released annually through 2018.

This year’s GPI shows that almost two-thirds (63 percent) of alumni who graduated from 2006-2015 say they used student loans to help finance their education. Among those who borrowed, the median loan was $30,000.

In the face of mounting debt, only half of all alumni (50 percent) “strongly agree” their university education was worth the cost. This figure varies only slightly between alumni of public universities (52 percent) and alumni of private nonprofit universities (47 percent), but it drops sharply to 26 percent among graduates of private for-profit universities, who also were more likely to have taken on higher levels of student loan debt.

“Given that higher education has become one of the largest financial investments a person will make over their lifetime, it’s a bit alarming that only half of all graduates strongly agree their education was worth the cost,” said Brandon Busteed, Gallup’s executive director for education and workforce development. “Clearly, we all need to work harder on improving quality and reducing cost as much as possible.”

Nearly half of recent graduates who incurred any amount of student loan debt reported postponing further training or postgraduate education because of those loans. A third or more have delayed purchasing a house or a car because of debt, and nearly one in five have put off starting their own business. Each of these figures rises significantly among those with a debt burden of $25,001 or higher.

“The GPI continues to highlight deficiencies on which we in higher education should be focused,” said Purdue President Mitch Daniels. “This year’s results serve as another reminder that student loan debt can be a significant obstacle to a student’s future success — and, in some cases, a long-term handicap.”

Recent graduates with a debt burden of $25,001 or more are almost twice as likely to strongly agree that their education was worth the cost if they recall supportive relationships with professors and mentors. And recent graduates with high debt are also less likely to put off continuing their education or starting a business because of student loans if they strongly agree they had supportive relationships in college.

The survey found only a loose correlation between universities’ U.S. News & World Report rankings and perceptions among their recent graduates that their education was worth the cost.

“We’ve said before that it’s not where you go to college but how you go to college that matters,” Daniels said. “Students get out what they put in, and they can get an excellent education at a wide variety of institutions across the country. As the study shows, their experience is determined much more by the relationships they build with mentors and the success they are able to achieve via their work on campus or abroad.”

Recent graduates who strongly agree with any of three items measuring supportive relationships with professors or mentors were almost twice as likely to strongly agree that their education was worth the cost. These relationships hold even when controlling for personality characteristics and other variables, such as student loan debt and employment status, that could also be related to graduates’ perceptions that college was worth it.

If recent graduates strongly agree that they had any of three experiential learning opportunities — an internship related to their studies, active involvement in extracurricular activities or a project that took a semester or more to complete — their likelihood to strongly agree that their education was worth the cost increases 1.5 times.

“The Gallup-Purdue Index continues to reinforce the importance of the outcomes of higher education,” said Jamie Merisotis, president and CEO of Lumina Foundation. “In our quest to increase college attainment and meet the growing need for talent in the United States, we must produce graduates who are able to thrive both professionally and personally. The GPI provides critical new data and information on the factors that drive these outcomes.”

The current GPI results reaffirm the importance to undergraduates of supportive relationships with professors and mentors. If employed graduates strongly agreed that they had professors who cared about them, they had at least one professor who made them excited about learning and they had a mentor who encouraged them to pursue their goals and dreams, their odds of being emotionally engaged at work nearly double.

The results from the initial GPI national survey were released in May 2014. Besides the findings about student engagement with faculty mentors, the index also reported there is no difference in workplace engagement or a college graduate’s well-being if they attended a public or private not-for-profit institution, a highly selective institution, or a top 100-ranked school in U.S. News & World Report. It also outlined the relationship between the level of student debt and a graduate’s well-being and entrepreneurial experience.